Slide 18 of 25 -- Scroll down for more text

UCITA brings together the laws governing contracts for sale and contracts for services. That's fine, but it applies to services the warranty laws that were developed for sales.

So consider the warranty of merchantability, which promises that the program is fit for the ordinary purposes for which such programs are used. That's great, but how does this play out for custom software, when the customer insists on a design that will not be fit for ordinary use?

When the end product doesn't work well, and there's a dispute between customer and developer, you have a mess under current law, with lots of he-said, she-said types of arguing. UCITA frames that discussion inside a warranty that says that the developer is normally responsible for making sure that the product is fit for use unless the developer can prove that the customer didn't want it that way.

As an attorney who represents small development and testing groups, I think this clause will make my negotiating life tougher when I face my clients' unhappy customers.

How is it that the larger consulting firms can live with this clause? The answer is that they work from standard form contracts, which disclaim the warranty of merchantability. The lawyers who negotiate those contracts, on both sides, understand and expect the disclaimer.

Independents can also try to get these clauses in their contracts, but they all too often fail. In a $20,000 contract, it is very unlikely that warranty disclaimers and remedy limitations will be agreed to by the customer.